JAMS, Inc. v. Superior Court of San Diego CountyJAMS, Inc. v. Superior Court of San Diego County
Long & Levit, Joseph P. McMonigle, Jessica R. MacGregor, Jonathan Rizzardi; Reed Smith, Paul D. Fogel and Dennis P. Maio for Petitioners.
No appearance for Respondent.
Bravo Law Group, Gregory L. Cartwright; Goode Hemme & Peterson, Jerry D. Hemme; Jenkins and Erik C. Jenkins for Real Party in Interest.
OPINION
McCONNELL, P. J.—
INTRODUCTION
This action arises from representations made on the JAMS, Inc. (JAMS), Web site regarding the background of the Honorable Sheila Prell Sonenshine (Retired), and JAMS‘s operations in offering alternative dispute resolution (ADR) services. Kevin J. Kinsella alleges he relied upon certain representations made on the Web site when he agreed to stipulate to hire Sonenshine as a privately compensated judge to resolve issues related to his marital dissolution case and later discovered the representations were either untrue or misleading.
BACKGROUND
A
JAMS provides private ADR services by promoting, arranging and handling the hiring of neutral individuals, such as retired judges, to assist with resolution of disputes. Kinsella alleges: “JAMS acts as the ‘promoter’ and as the ‘booking’ agent for its neutrals, procuring engagements for them through the use of advertising and marketing. The neutrals are independent contractors, with JAMS collecting a fee from the neutrals for the services it provides in connection with the advertising, marketing, promotion, and ‘booking’ services. JAMS, in fact, collects the fees from the consumers who pay for the services of the neutrals and JAMS in turn pays the neutrals.”
JAMS allegedly “directs and controls the publication of the JAMS [Web site] and the statements made on that site.” JAMS provides biographies of its neutrals on its Web site and represents its family law neutrals are ” ‘trusted’ experts.” According to the complaint, the JAMS Web site stated “[JAMS ensures] the highest ethical standards” and “[e]verything we do and say will reflect the highest ethical and moral standards. We are dedicated to neutrality, integrity, honesty, accountability, and mutual respect in all our interactions.”
Sonenshine is on JAMS‘s panel of neutrals. According to the complaint, she is a “former California Superior Court judge and a retired California
B
Kinsella agreed to hire Sonenshine through JAMS to adjudicate his pending marital dissolution action, involving assets he states were “valued somewhere north of eight figures.” These included assets from venture capital partnerships founded and managed by Kinsella. At the suggestion of his wife‘s attorney, Kinsella reviewed the JAMS Web site and Sonenshine‘s credentials. He alleged he did so carefully because he understood “the importance of selecting someone he could respect and trust to rule on the life-changing decisions” in his marital dissolution case and he wanted to “assure himself he was selecting someone who satisfied his need to have confidence in the jurist and, specifically, a person who would understand principles of business ventures and private equity funding.”
He alleged, based on the JAMS representations, he expected he could rely on the “honesty and integrity” of Sonenshine‘s biography, which he stated “was impressive.” Kinsella alleged Sonenshine “was claiming experience that evidenced sufficient business acumen to understand his separate property holdings and private venture capital funds.”
The stipulation and order appointing Sonenshine as the privately compensated temporary judge for Kinsella‘s marital dissolution case gave Sonenshine authority “to make all orders necessary and proper to bring [the] case to judgment.” After Sonenshine began conducting hearings, Kinsella alleged he “became alarmed by what he saw and doubted that she possessed the business accomplishments her resume led him to believe she possessed.” He began to look into her background “to determine whether her [biography] accurately reflected her career achievements, especially as they concerned her business ventures.” He concluded her biography “omitted key information” causing him to question her integrity.
C
Kinsella filed a complaint alleging Sonenshine‘s biography on the JAMS Web site was dishonest in two respects: (1) it “proclaimed business success surrounding the co-founding and management of [EquiCo and RSM EquiCo]” when “the history of those two ventures is full of adverse and unfavorable accusations” against Sonenshine and her son in a class action lawsuit for fraud, and (2) it “proclaimed she was the founder of the [Escher Fund], an equity fund that focused on growth-state, women-owned, and
The complaint alleged Sonenshine omitted information about the class action lawsuit because it would injure her reputation, reflect poorly on her background or discourage consumers from selecting her as a neutral. It further alleged Sonenshine knew her biography was misleading in implying “the Escher Fund was an actual operating fund, one that had successfully raised equity capital, when it never was either.”
As to JAMS, the complaint alleged, “[b]y representing Sonenshine to be a person of the highest ethical standards, JAMS misrepresented the nature of her qualifications as a neutral to be hired from its [Web site]. [. . .] By ‘ensuring’ that its neutrals conduct themselves with the highest ethical standards, JAMS accredited the deception committed by Sonenshine.” (Some capitalization omitted.)
The complaint set forth four causes of action: (1) violation of the Consumers Legal Remedies Act (
The complaint stated “all allegations of wrongdoing relate to information Kinsella specifically viewed on defendant JAMS’ [Web site] before he agreed to select Sonenshine as the [privately compensated temporary judge].” (Some capitalization omitted.) Kinsella sought injunctive relief, actual damages exceeding $250,000, punitive damages, prejudgment interest, disgorgement, and restitution.
D
JAMS and Sonenshine filed an anti-SLAPP motion contending Kinsella‘s action arose from protected activity because the statements in Sonenshine‘s biography and on the JAMS Web site were made in connection with an issue under consideration by a judicial body. They also contended Kinsella would
Kinsella moved for an order determining the allegations in the complaint are exempt from the anti-SLAPP statute under the commercial speech exemption of
The court determined the commercial speech exemption of
The court determined statements on the JAMS Web site, which promotes ADR services and “allegedly describe[] its neutrals as having the ‘highest ethical and moral standards’ and [state] they are ‘dedicated to neutrality, integrity, honesty, ” were not mere puffery, but were statements that “can be provably false factual assertions.” The court concluded “JAMS is a for-profit enterprise. [Its] statements regarding the trustworthiness, integrity and honesty of its enterprise as well as its neutrals [are] purely commercial speech. The resume is included on the [Web site] for commercial purposes . . . to sell ADR services.”
DISCUSSION
I
General Principles
SLAPP lawsuits, ” ‘masquerade as ordinary lawsuits . . . [but] are generally meritless suits brought primarily to chill the exercise of free speech
“In 2003, concerned about the ‘disturbing abuse’ of the anti-SLAPP statute, the Legislature enacted
“The commercial speech exemption ‘is a statutory exception to section 425.16’ and ‘should be narrowly construed.’ ” (Simpson, supra, 49 Cal.4th at p. 22.) “[T]he party seeking the benefit of the commercial speech exemption . . . [has] the burden of proof on each element.” (L.A. Taxi Cooperative, Inc. v. The Independent Taxi Owners Assn. of Los Angeles (2015) 239 Cal.App.4th 918, 931 [191 Cal.Rptr.3d 579].) “We review the applicability of the commercial speech exemption independently.” (Simpson, at p. 26.)
II
Analysis
JAMS and Sonenshine contend the commercial speech exemption is not applicable for two reasons. First, they contend the statements about which Kinsella complains are not “representations of fact” involving positive assertions of past or present conditions or events, but are omissions or nonactionable opinions. Second, they contend the statements from which the causes of action arise were not made for purely commercial purposes. We are not persuaded by either contention.
A
We do not agree the commercial speech exemption is limited to exclude from the anti-SLAPP statute only causes of action arising from positive assertions of facts. This contention is not supported by either the plain language of the statute or its legislative history.
“Under the two-pronged test of
Responding to concerns an exemption would impact the free speech rights of businesses, the legislative history of
Here, Kinsella‘s causes of action against JAMS and Sonenshine arise from statements posted on the JAMS Web site regarding Sonenshine‘s background and qualifications to provide ADR services as well as general statements about how JAMS conducts its business in providing ADR services. These statements fit comfortably within the commercial speech exemption of
The representations made in Sonenshine‘s biography are representations of fact. Whether those facts are true or whether she should have included additional facts to ensure the representations were not misleading goes to the issue of whether or not Kinsella can prevail on his claim, not to whether the statements qualify as commercial speech subject to the exemption of
The statements that JAMS ensured ” ‘the highest ethical standards,’ ” that ” ‘[e]verything we do and say will reflect the highest ethical and moral standards’ ” and that JAMS is ” ‘dedicated to neutrality, integrity, honesty, accountability, and mutual respect in all our interactions’ ” are also representations of fact for purposes of analyzing the commercial nature of the speech. Although using words of emphasis, they are specific statements representing how JAMS conducts its operations with neutrality, integrity, honesty and accountability. They are certainly intended to be relied upon by customers of its services, otherwise they would serve no legitimate purpose. (Demetriades, supra, 228 Cal.App.4th at pp. 311–312.) As the trial court commented, “After all, it is the violation of these types of standards and qualities that cause Bar members to be disciplined by the State Bar.” It is also worth noting the posting of Sonenshine‘s biography in conjunction with these statements may have implicitly represented JAMS adopted her representations about her
The cases upon which JAMS and Sonenshine rely do not assist them. In Simpson, supra, 49 Cal.4th 12, the court concluded an attorney‘s representations about a product in an advertisement to recruit potential plaintiffs for a class action suit did not fall within
In Navarro, the court held
The statements about JAMS are not mere promises, but representations of fact about the neutrals it employs and how it conducts its business. These representations published on a Web site to induce litigants to engage in ADR services offered by JAMS were commercial speech for purposes of
B
JAMS and Sonenshine also contend the commercial speech exemption does not apply because the statements on the JAMS Web site might be used for multiple purposes, such as to comply with Sonenshine‘s judicial duty of disclosure, or because the causes of action arise from postretention conduct, not commercial speech. We do not agree.
Taheri Law Group v. Evans (2008) 160 Cal.App.4th 482 [72 Cal.Rptr.3d 847] (Taheri) held the commercial speech exemption does not apply to a lawsuit filed by a law firm against another attorney for intentional interference with prospective economic advantage and intentional interference with business relations for soliciting the law firm‘s client. The court concluded “a cause of action arising from a lawyer‘s conduct, when the conduct includes advice to a prospective client on pending litigation, does not fall within the statutory exemption to the anti-SLAPP statute.” (Id. at pp. 485, 490.) The court commented the legislative history of the commercial speech exemption confirmed “the Legislature‘s intent to except from anti-SLAPP coverage disputes that were purely commercial.” (Id. at p. 491.)
We do not understand the comment in Taheri to mean a statement giving rise to a cause of action must be purely commercial and have no other use to fall within the commercial speech exemption. The Taheri court noted “[a] dispute involving a lawyer‘s advice to a prospective client on pending litigation . . . while it may include an element of commerce or commercial speech, is fundamentally different from the ‘commercial disputes’ the Legislature intended to exempt from the anti-SLAPP statute.” (Taheri, supra, 160 Cal.App.4th at p. 491.) The court acknowledged “lawyers engage in ‘commercial speech’ when they advertise their services” and stated “we can envisage circumstances—such as a ‘massive advertising campaign’ divorced from individualized legal advice—under which the commercial speech exemption to the anti-SLAPP statute conceivably might apply to a lawyer‘s conduct.” (Id. at pp. 491-492.)
The issue is whether or not the statement or conduct from which the causes of action arise is speech used to induce a commercial transaction. The Taheri court concluded the ” ‘statement or conduct’ ” from which the causes of
Notes
Further statutory references are to the